Treasury yields to 10 years increased the most in almost two weeks

Treasury yields to 10 years increased the most in almost two weeks a year as the growing sense that the Fed will succeed in boosting economic growth and prevent deflation.

The yield on the 10-year bond rose 34 basis points for the two weeks that ended yesterday, the highest since December 2009 as a group that includes former Republican government officials and economists urged the Fed to reconsider the quantitative easing. Fed chairman, Ben S. Bernanke defended his fellow monetary stimulus from central banks yesterday, saying it would help the global economy. The Federal Reserve on November 23 will release the minutes of the meeting of Federal Open Market Committee held earlier this month.

"The market has been under pressure for the last couple of weeks because of the rhetoric within the Federal Reserve and around the world about QE and because the rest of the set for QE profitable operations," said Dan Mulholland, a trader Treasury in New York Royal Bank of Canada, one of the 18 primary dealers that trade with the Fed. "You have had positive economic data points."

yields ten-year note was up eight basis points, or 0.08 percentage point to 2.87 percent yesterday in New York, according to BGCantor Market Data. The price of 2,625 per cent security due in November 2020 fell 23/32, or $ 7.19 per $ 1,000 face amount, to 97 27/32. The yield rose to 2.96 percent on 16 November, the highest in three months.

QE2 criticism

The Fed chief is facing criticism from officials in countries like China and Brazil who say that the November 3 decision to buy $ 600 billion in Treasury bonds has weakened the dollar and contributed to capital flows emerging markets. The policy also has been criticized in the U.S., where critics, including Republican members of Congress have said they run the risk of fueling inflation and asset bubbles.

The U.S. unemployment rate 9.6 percent is "high and, given the slow pace of economic growth is likely to remain for some time," Bernanke said in Frankfurt yesterday where he defended the quantitative easing.

After the speech, Bernanke spoke at a panel discussion and answered questions from the audience, saying that the use of purchases of monetary policy affects asset prices "significantly." He said he is "very skeptical" of the criticism that central banks are "pushing on a string."

Consumer prices excluding food and fuel, the indicator followed by central banks, increased 0.6 percent from October 2009, the smallest increase in year-over-data that goes back to 1958, the Labor Department said on Nov. 17 in Washington.

Improved data

Treasuries swung between losses and gains this week amid economic data better than expected.

Manufacturing in the Philadelphia region expanded in November at its fastest pace this year, orders, sales and employment rose, indicating U.S. and external demand continue to drive growth of the company, a report showed that on 18 November. general economic index of the Philadelphia Fed rose to 22.5 last month, surpassing the most optimistic forecasts.

The U.S. index of leading indicators rose in October for the fourth consecutive month on signs the Fed is prepared to take additional measures to stimulate the world's largest economy.

The New York-based The Conference Board gauge the outlook for the next three to six months rose 0.5 percent for the second straight month, matching the median forecast of economists surveyed by us covered the largest gains back -to-back "from February to March. Six of the 10 components increased.

Fed buys

In its first round of purchases of assets, ended in March, the Fed bought 1.75 trillion U.S. dollars in securities, including $ 300 billion in Treasuries in an effort to stimulate economic growth strong enough to reduce unemployment near a maximum of 26 years. The Fed has gained 38.12 billion U.S. dollars in Treasury bonds since the start of the second round of shopping on 12 November.

Yesterday, the Federal Reserve bought $ 24 billion auction of 16 billion U.S. dollars 30-year bonds sold on 10 November. Bonds pointed to an interest rate of 4.32 percent, the highest in any auction of the securities since May. The bid-cover ratio, which measures demand by comparing total bids on the amount of securities offered, was 2.31, the lowest since November 2009.

The Fed will buy securities maturing between February 2018-2020 November 22 November and the debt maturing in July 2012 to February 2040 the following day.

The Treasury will sell $ 35 billion two-year notes and $ 35 billion in debt for five years and $ 29 billion worth of seven years for three days from November 22, coincides with the results of a  News survey of primary dealers.

The total of 99 billion U.S. dollars has not changed since the amount of the October sales of securities. President Barack Obama has increased the U.S. debt trade to a record $ 8,540,000,000,000.